Mining, but what else?
Mining and more mining: What else are there in Mongolia?
As of today, Mongolia is at the center of world’s attention thanks to its abundant coal, copper, and gold deposits; aided with heavy foreign investments, some of them are ready to begin producing in the next few years.
There are still many untapped mineral resources in Mongolia, making the country a very attractive place to invest. The currently known mineral resources promise Mongolia an annual GDP growth of 10 – 20% in the next several years. Mongolia is set to become the one of the fastest growing economies in the region and world.
Economically, mining has become Mongolia’s best friend. But having more friends wouldn’t hurt. Is it safe to depend on mineral exports alone? Does Mongolia have other potential exports that can compensate for the income of mineral resources if things do not go as expected?
Listening to concerns from many different parties, including addresses from the President and the Prime Minister of Mongolia, one can see that the mining sector of Mongolia has a bucketful of problems to solve at this stage in development.
Currently, the mining sector is constantly threatened by corruption, underdeveloped policies, communication and transportation problems, and a threat from the European debt crisis for good measure. While these concerns may be addressed individually and eventually either prevented or solved in the near future, this does not mean Mongolia should put all its trust to its mining sector.
In March 2011, Mongolian Prime Minister S. Batbold told Bloomberg that the blossoming of Mongolia’s mining industry is a golden chance to further invest in and develop Mongolia’s other important, job-creating industries.
As noted in ‘The Report: Mongolia 2012,’ released by the Oxford Business Group, Mongolia’s additional potentials lie in its tourism and agricultural sectors.
Mongolia is currently one of the biggest exporters of cashmere in the world, but it appears that lack of unity is negatively affecting total Mongolian dominance in the cashmere market. Wool and wheat exports could become major contributors to Mongolian economy. When Russia temporarily banned wheat exports to Mongolia in 2010 due to wildfires destroying reserved wheat, Mongolia was able to sustain its domestic demand with its own wheat.
Statistics from the Ministry of Food Agriculture and Light Industry of Mongolia show that in 2011, the agricultural sector made up 15.9% of GDP, and 12.5% of export incomes were derived from agricultural products. Over 80% of agricultural products are from animal husbandry. In 2000, the agricultural sector made up 30 – 40% of Mongolian GDP and has since been decreasing due to a worsening climate; mainly droughts and zuds.
Today, Mongolia’s agricultural sector is growing at a steady rate, with 33.5% of total workforce working in the sector. Recently, Mongolian meat products – mutton, beef and lamb –passed international food hygiene standards, and have substantially increased Mongolian meat prices and opened doors to new importers of Mongolian meat.
Another sector vital to Mongolian economy is tourism. Although Mongolian commercial tourism companies are only about 20 years old, tourism in Mongolia existed in the days of communism, albeit being very limited because of Soviet Union influence.
The Mongolian tourism sector focuses on two things: Mongolian traditional culture and heritage and the Mongolian natural environment.
Along with a great history involving conquering half the dry land on earth, Mongolia’s culture is a subject of interest for travelers and tourists. Specific ones include Tsagaan Sar (Mongolian Lunar Month Holidays), which is equivalent to the Chinese New Year. Another event that attracts many visitors during summer is Naadam, a Mongolian traditional festival consisting of three manly games: wrestling, archery and horse racing. Mongolian income from its tourism sector has doubled since 2000, reaching USD 450,000.
Almost all of the Mongolian natural environment, because of low population density, has been left undisturbed. Great scenery, exotic, rare animals and raw nature has become one of the major attractions for tourists. The Government is well aware of the mining industry posing a threat for the natural environment.
Mongolia may be home to the world’s largest coal mine, with huge reserves of copper, gold, and rare earths.
This does not mean Mongolia should be dependent on them – especially when there are so many potential exports available. Like Chile, one of the world’s largest copper producers, Mongolia is on its way to heavily invest in its other sectors through the help of mining.
As of today, Mongolia is at the center of world’s attention thanks to its abundant coal, copper, and gold deposits; aided with heavy foreign investments, some of them are ready to begin producing in the next few years.
There are still many untapped mineral resources in Mongolia, making the country a very attractive place to invest. The currently known mineral resources promise Mongolia an annual GDP growth of 10 – 20% in the next several years. Mongolia is set to become the one of the fastest growing economies in the region and world.
Economically, mining has become Mongolia’s best friend. But having more friends wouldn’t hurt. Is it safe to depend on mineral exports alone? Does Mongolia have other potential exports that can compensate for the income of mineral resources if things do not go as expected?
Listening to concerns from many different parties, including addresses from the President and the Prime Minister of Mongolia, one can see that the mining sector of Mongolia has a bucketful of problems to solve at this stage in development.
Currently, the mining sector is constantly threatened by corruption, underdeveloped policies, communication and transportation problems, and a threat from the European debt crisis for good measure. While these concerns may be addressed individually and eventually either prevented or solved in the near future, this does not mean Mongolia should put all its trust to its mining sector.
In March 2011, Mongolian Prime Minister S. Batbold told Bloomberg that the blossoming of Mongolia’s mining industry is a golden chance to further invest in and develop Mongolia’s other important, job-creating industries.
As noted in ‘The Report: Mongolia 2012,’ released by the Oxford Business Group, Mongolia’s additional potentials lie in its tourism and agricultural sectors.
Mongolia is currently one of the biggest exporters of cashmere in the world, but it appears that lack of unity is negatively affecting total Mongolian dominance in the cashmere market. Wool and wheat exports could become major contributors to Mongolian economy. When Russia temporarily banned wheat exports to Mongolia in 2010 due to wildfires destroying reserved wheat, Mongolia was able to sustain its domestic demand with its own wheat.
Statistics from the Ministry of Food Agriculture and Light Industry of Mongolia show that in 2011, the agricultural sector made up 15.9% of GDP, and 12.5% of export incomes were derived from agricultural products. Over 80% of agricultural products are from animal husbandry. In 2000, the agricultural sector made up 30 – 40% of Mongolian GDP and has since been decreasing due to a worsening climate; mainly droughts and zuds.
Today, Mongolia’s agricultural sector is growing at a steady rate, with 33.5% of total workforce working in the sector. Recently, Mongolian meat products – mutton, beef and lamb –passed international food hygiene standards, and have substantially increased Mongolian meat prices and opened doors to new importers of Mongolian meat.
Another sector vital to Mongolian economy is tourism. Although Mongolian commercial tourism companies are only about 20 years old, tourism in Mongolia existed in the days of communism, albeit being very limited because of Soviet Union influence.
The Mongolian tourism sector focuses on two things: Mongolian traditional culture and heritage and the Mongolian natural environment.
Along with a great history involving conquering half the dry land on earth, Mongolia’s culture is a subject of interest for travelers and tourists. Specific ones include Tsagaan Sar (Mongolian Lunar Month Holidays), which is equivalent to the Chinese New Year. Another event that attracts many visitors during summer is Naadam, a Mongolian traditional festival consisting of three manly games: wrestling, archery and horse racing. Mongolian income from its tourism sector has doubled since 2000, reaching USD 450,000.
Almost all of the Mongolian natural environment, because of low population density, has been left undisturbed. Great scenery, exotic, rare animals and raw nature has become one of the major attractions for tourists. The Government is well aware of the mining industry posing a threat for the natural environment.
Mongolia may be home to the world’s largest coal mine, with huge reserves of copper, gold, and rare earths.
This does not mean Mongolia should be dependent on them – especially when there are so many potential exports available. Like Chile, one of the world’s largest copper producers, Mongolia is on its way to heavily invest in its other sectors through the help of mining.
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